DoD's $24M Verizon Contract for Wired Telecom Services Extended to 2024
Contract Overview
Contract Amount: $23,968,771 ($24.0M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of Defense
Start Date: 2012-01-10
End Date: 2024-02-24
Contract Duration: 4,428 days
Daily Burn Rate: $5.4K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VZBZ000439EBM
Place of Performance
Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $24.0 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VZBZ000439EBM Key points: 1. Significant contract value of $23.97M over 12 years. 2. Full and open competition was utilized, suggesting potential for competitive pricing. 3. The contract spans a long duration, raising questions about long-term value and adaptability. 4. Focus on wired telecommunications carriers within the Defense sector.
Value Assessment
Rating: fair
The contract's fixed price nature over a long period may not reflect current market rates. Without detailed cost breakdowns, assessing value is difficult, but the extended duration suggests potential overpayment if technology or needs have shifted.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Full and open competition was employed, which typically drives competitive pricing. However, the extended duration of the delivery order might obscure the initial price discovery effectiveness.
Taxpayer Impact: Taxpayer funds are committed for a substantial period, necessitating ongoing scrutiny to ensure continued value for money.
Public Impact
Ensures critical communication infrastructure for the Department of Defense. Supports military operations and administrative functions through reliable network services. Long-term commitment impacts budget planning for defense communications.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Extended contract duration
- Lack of current market price comparison
- Potential for technology obsolescence
Positive Signals
- Full and open competition
- Established provider
Sector Analysis
This contract falls within the IT and Telecommunications sector, specifically wired telecommunications carriers. Spending benchmarks for similar government contracts in this area vary widely based on service scope and duration.
Small Business Impact
The contract data does not indicate any specific set-asides for small businesses. The prime contractor, Verizon Business Network Services LLC, is a large entity, suggesting limited direct opportunities for small businesses as prime contractors on this specific award.
Oversight & Accountability
The long duration of this delivery order warrants regular review by the Defense Information Systems Agency to ensure continued relevance and cost-effectiveness. Oversight should focus on performance metrics and potential renegotiation points.
Related Government Programs
- Wired Telecommunications Carriers
- Department of Defense Contracting
- Defense Information Systems Agency Programs
Risk Flags
- Extended contract duration (12 years)
- Potential for technology obsolescence
- Lack of current market price comparison
- Risk of vendor lock-in
- Limited transparency on specific service costs
Tags
wired-telecommunications-carriers, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.0 million to VERIZON BUSINESS NETWORK SERVICES LLC. VZBZ000439EBM
Who is the contractor on this award?
The obligated recipient is VERIZON BUSINESS NETWORK SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Information Systems Agency).
What is the total obligated amount?
The obligated amount is $24.0 million.
What is the period of performance?
Start: 2012-01-10. End: 2024-02-24.
What is the current market rate for similar wired telecommunications services, and how does it compare to the contracted price over its extended duration?
Determining the precise current market rate is challenging without specific service details and volume. However, given the 12-year span, it's probable that market rates for comparable services have evolved. A thorough analysis would involve benchmarking against recent contracts for similar bandwidth, latency, and geographic coverage, factoring in technological advancements that may have reduced costs or increased capabilities.
What are the risks associated with a 12-year contract for wired telecommunications, particularly concerning technological obsolescence and vendor lock-in?
A 12-year duration presents significant risks. Technology in telecommunications advances rapidly; services contracted in 2012 may be outdated by 2024. This could lead to paying premium prices for legacy systems or facing performance limitations. Vendor lock-in is also a concern, potentially hindering the adoption of more innovative or cost-effective solutions from competitors.
How effectively has the full and open competition process ensured optimal value for taxpayer money over the life of this contract?
While full and open competition is a positive indicator for initial price discovery, its effectiveness over a 12-year period is questionable. The initial competitive pricing may not remain optimal as market conditions and technology evolve. Without periodic re-competition or robust price adjustment clauses tied to market benchmarks, the long-term value proposition might diminish, despite the initial competitive award.
Industry Classification
NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Maryland LLC
Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $23,968,771
Exercised Options: $23,968,771
Current Obligation: $23,968,771
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HC101909D2000
IDV Type: IDC
Timeline
Start Date: 2012-01-10
Current End Date: 2024-02-24
Potential End Date: 2024-02-24 00:00:00
Last Modified: 2024-01-24
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